Extend the Warranty or Not?

<div class='quotetop'>QUOTE(berryman @ Apr 5 2006, 10:00 AM) [snapback]235221[/snapback]</div>

This has already been discussed. Most seem to favor getting it due to the electronic complexity of the car. Some feel it is an unecessary money maker for the insurance underwriters. I am at 18, 000 miles so I don't have to decide yet. I have had no problems at all so far.

 

Toyotas are generally very reliable, but any given car can break down, and some small percentage will.

Ask youself: could you afford a major repair if you were one of the very unlucky ones? If not, you might want the insurance.

Ask yourself: are you a gambler? If not, you might lean toward the insurance.

Ask yourself: Are you a worrier? With insurance you eliminate a source of worry.

In my opinion, the car is extremely unlikely to experience a problem that would cost as much as the insurance. Plus, I can afford a repair should it come to that. Finally, the extended warranty expires before the car reaches the age where most problems begin to appear.

Conclusion: I consider the extended warranty to be very overpriced, even at the bargain rate offered here. But if you are a worrier and could not afford a major repair, the cost of the warranty might be worth the peace of mind.

 

Maybe I can ask this question again on a current warranty thread: Is the deal offered here (was it Troy?) available outside of the US?

 

failure rate is low but repair expenses are high when something happens. you're taking a gamble either way. without the warranty, you're gambling that you'll have less than $1000 in repairs before the extended warranty would have worn out. with the warranty, you're gambling that you'll have $1000 or more in repairs before the extended warranty runs out.

one failure of a key component could very easily put you in that $1000 range or beyond.

but considering the reliability, you may have no failures at all, in which case you've spent $1000 basically for peace of mind.

think it over. if you can justify it, go ahead. if not, hold off.

 

How much is the extended warranty when you have 36k miles? And how long does it last?

 

<div class='quotetop'>QUOTE(clintd555 @ Apr 5 2006, 03:45 PM) [snapback]235517[/snapback]</div>

You can read about it at http://priuschat.com/index.php?showtopic=3130&hl=warranty
Basically for $990 it's 7/100K with $0 deductable.

I'm planning to get it. I got one for my camcorder and never needed it. I got one for my refrigerator and used it. I got one for my last car and needed it, but because I had gotten it from the car broker (ie a third party policy), it was no good. Actually I can't say that for a fact. I gave the salesman $600 and got a pretty piece of paper in return. The salesman evidently "forgot" to set it up after taking my money as when I contacted the company they had no record of it.

 

How long are you going to keep the car? In addition to it's primary benefits of offering protection while you own the car, it might also help optimize resale value down the road (if you plan to sell the car privately). Lets say you have a 5 year old Prius with 60,000 miles for sale. The buyer of this used car can have the option of having the remaining balance of your extended warranty (a 2 year/40,000 mile bumper to bumper warranty in this case). You can fairly pro-rate the value of the extended warranty and sell this as an add-on (plus the $50 transfer cost). I'd guess the vast majority of buyers would jump at the deal, and in fact this is better protection than dealerships would offer on a similar second hand vehicle.

 

I bought a Prius in 2001 and the extended warranty at the same time. Way back then, what we had to go on was Prius being quite new technology, and Toyota's favorable reputation for reliability. Since then I have driven 86k miles and made no claims against the EW. I have also read innumerable internet posts concerning Prius' reliability, which have been overwhelmingly favorable. A few vehicles have had expensive failures outside of warranty, and in most of those cases, Toyota has apparently paid at least part of the expense. In addition, on both Prius models, systemic problems that could potentially affect large numbers of vehicles have resulted in SSCs and TSBs that are no-cost to the vehicle owner up to some mile/time limit. From that I conclude Toyota is quite committed to the reputation for reliability of Prius in particular.

High reliability ratings for Prius by Consumer Reports, etc., indicate that survey respondents are generally satisfied. High resale values suggest that used car buyers (as a group) agree. Or perhaps that fuel cost savings will outweigh repair expenses? If that is the case, I would agree with them.

My philosophy on risk aversion has not changed since 2001, but more Prius information has becaome available since. So if I were buying a new Prius today (or approaching 36k miles), I would not purchase the EW. People who are especially risk-averse may still decide to do so, however.

It was never my intention to resell the car; this one is a keeper. However if someone is buying Prius with the plan to resell within the EW period, I consider this a strong argument in favor of EW purchase. Your potential buyer may not have access to all the Prius info that we see in the groups.

 

I'm with daniel and gordonr. I'm a worrier, big-time.

Also, in the example given: if you sold the car as stated, you'd have used up 3/8 of the EW (or paid 38% X $1K = $380 for that much peace of mind, however you want to look at it). Seen this way, the remaining "retail value" of the EW is $620. (Actually, you could argue to a buyer, more than that, since a buyer couldn't even buy the protection at the time of sale.)

Is the presence of an EW going to get you your $620 back? I think almost unquestionably, YES. If you include the fact that there's an EW in your ad, I'd guess about, say, 3-5 times as many people as otherwise would be instantly interested and will look at it. Probably the #1 "negative" with a Prius in the minds of potential buyers will be fear of the new technology, and perhaps specifically, battery failure. You've increased your market that much---and your likelihood of getting your price.

I think it's a no-brainer---almost.

I also want to note that, big as PC is, we represent only a tiny fraction of total American Prius buyers. We really have little basis for making generalizations about warranty claims, and specifically the kinds of repairs to which the Prius is prone. What we know is the experiences WE'VE traded with each other, TSBs, plus what we've picked up on other forums, and what we hear and read about in newspapers and magazines. We really DON'T know more than Consumer Reports, given the size of their samples, though we may know more about a specific or two.

I'm not putting down PC. If anything, I'm making a case for a more systematic approach to our building a reliable database.

 

ghostofjk,
Your argument is valid assuming that there is no pain and suffering in transfering the EW to the next owner.
I don't know about the Toyota EW being discussed here, but my other vehicle, a BMW, was covered by EW from a BMW dealer.
(precisely a 3rd party EW sold by the BMW dealer)
The transfer of EW is not as easy as one might think:
- the car needs to pass an inspection ($200) by a BMW dealer
- you need to pay a $75 transfer fee (application fee, mind you)
- it is their sole decision whether to reject it (transfer) or not
(so who is paying the $275 cost induced by this transfer before it is even granted?!)

Please read the fine print first before anyone assumes anything. I hope Toyota's EW is not like that.

 

<div class='quotetop'>QUOTE(ceric @ Apr 6 2006, 04:12 PM) [snapback]236020[/snapback]</div>

Third-party EWs are notorious for doing anything within their specs to deny transferability. I've had it happen, and would never recommend anyone to buy a third-party. But twice I've transferred TFS EWs with no problem.

Third-party ones will, for example, ask for ALL your maintenance records to account for every oil change---very close to "on time"---, every 30K/60K service (which many people either skip or do only partially); and if you do your own oil changes, God help you if you're missing one receipt for one oil filter (which you may have forgetfully sent in for a rebate) , or, if you buy oil by the case, using it for two cars, and can't account for every quart used in the EW'd car.

 

Extended warranty is a waste of money on the Prius. The last thing Toyota wants is for their showcase hybrid car, the Prius II, to have repair problems so they way over-engineered the Prius. History is going to show that the Prius was the most reliable car ever made. The evidence is already overwhelming in this regard, even after only 2 years of production. There are Prius II taxis in Vancouver with over 200,000 miles on them with no problems reported.

 

My car has 36,600 miles. I did not buy the extended warranty.

 

Somewhere shy of 20,000 miles I had a showstopping brake problem
that took the tech a week to fix and involved replacing the brake
ECU *and* the entire actuator block with the accumulator, solenoids,
and pressure sensors. And bleeding that system is a labor beeyatch.
.
Cause unknown, but covered under original warranty.
.
Just sayin'.
.
_H*

 

I bought the extended warranty.

 

I highly doubt that a buyer would pay extra for the extended warranty, unless she/he is one of those compulsive worriers who really expects to have problems with the car. A normal buyer would point to the fact that the blue book price does not change when there is an EW. And a normal buyer would argue that he/she is already paying a lot because of the higher-than-average used price of Prius.

 

As I alwasy say,
"Buy Japanese, Lease German" vehicles.
If you must own a German, you have to arm yourself with EW.
Within 2 years of my 4 yrs EW, I have recovered the premium I pay 2 years ago.
A tranny would easily cost you $5000 to repair. My friend's BMW 323 tranny went at 65K miles.
I told him to purchase EW or sell it. He obviously did not take either suggestion. He is now $5000 less.
All my Japanese vehicles (Honda/Acura/Toyota) have been repair-free (I typically own them for 7 years).
I wouldn't spend a dim on EW for them. Prius is special, though. I am still sitting on the fence.

 

This question is coming up for me too, at 33K miles.

I think that two considerations will in the end push me to buy the warranty (the first I have *ever* bought, for anthing):

1. Repair parts from junkers/3rd parties are still not common, and buying from Toyota is a nasty joke. This situation improves monthly. As Galaxee says, repairs are uncommon, but can be almost expensive enough to junk the car.

2. Resell. Daniel makes salient arguments argainst warranty for resell, but they are based on non-hybrids and do not necessarily apply to our Prii. If Toyota comes out in 2008 with a plug-in LiIon model, I may wish to trade, and would like to be able to private sell for top dollar, and not have some ignoramus ask me if the HV is going to die the day after the sell.

Anyway, I am not a worrier, and I am able to pay for repairs out of pocket; yet, I think this warranty may be a reasonable purchase.

 

Having a 15 year background in computer technology as well as a 20 year background in broadcast engineering, I have come to the conclusion that the higher the complexity of a product made of electronics and/or computers the more apt it will fail at some point in time. While I regard Toyota in the highest esteem for their reliability, experience has shown that problems can and do happen and can be quite expensive to repair. I therefore purchased the extended warranty for my 2006 Prius. Yes I could have waited but I looked at it as locking it in at the 2006 price.

Just my 2 cents.